Finance for Prosperities at Building Bridges Geneva

Published December 2021

The Economics of Mutuality team was invited to lead a session at the 2021 Building Bridges Week this November on the topic ‘Finance for Prosperities’. The week of events in Geneva was designed to advance important conversations on sustainable and impact finance — showcasing concrete commitments, initiatives and action to make finance a key catalyst for change.

Key Takeaways

• The role of finance has been to facilitate investments and accelerate growth and development but it has evolved into a more proactive lever to solve societal and environmental issues.

• The financial industry is already heavily regulated but updating regulation to reflect today’s new realities is essential to meet the needs of society and the planet. This also creates an imperative for finance players to find a better way to measure and manage impact.

• Geneva has a unique opportunity to forge dynamic partnerships with its strong academia, financial organizations and international organizations– bringing together research, application and agenda-setting to develop innovative solutions for finance.

Summary

Bruno Roche, Economics of Mutuality Founder and Executive Director, opened the session by proposing that the Spirit of Geneva is invited to remind the city of John Calvin, Jean-Jacques Rousseau and Henri Dunant of its responsibility to reform finance, rewrite the laws of profit, and reposition finance to be in service of a mutual form of prosperity.

Lucie Keller, an Associate at EoM Solutions, then offered an introduction to the Economics of Mutuality, covering its development, the platform built around it, and its approach to ‘completing capitalism’. She also presented the Purpose Scanner, a new digital solution driven by the Economics of Mutuality that measures and mobilises an organisation’s purpose.

Next, Nadia Terfous, Managing Director at EoM Solutions, introduced and moderated a panel discussion featuring Rosa Sangiorgio, Head of Responsible Investing at Pictet Wealth Management, Nathan Sussman, Professor at the Graduate Institute of Geneva, and Melchior de Muralt, Managing Partner at PPT & Co and Co-Founder of BlueOrchard Finance.

The panel discussion covered the following points:

• Finance has evolved from being a bare transactional service provider and a facilitator of investments generating economic growth into a global lever for social and environmental change. This can mean transforming the traditional risk/return frontier into one of risk/return/impact.

• Equitable sharing is a powerful way of aligning incentives closer together – investing in people and companies and sharing in growth.

• Additionality, additional impact on the value chain, will be the prerequisite for qualifying impact investing solutions, but it is currently very difficult to prove. Regulation and improvements in data collection, selection and measurement techniques will help to move this forward and bring the role of ESG in investing past exclusion into integrating impact.

• Geneva has the ability to use multi-stakeholder dialogues and initiatives to develop innovative financing solutions that create positive externalities linked to the developmental finance agenda.

To conclude the session, Gavin Long, Co-Founder and Partner at the Acacia Group, spoke about the application of the Economics of Mutuality to the private equity and investment world. He suggested that:

• Ecosystem approaches are an opportunity for a new area of private equity investing and the Economics of Mutuality provides a powerful lens to create a new era of value creation by using ecosystems to not only drive purpose but also give visibility to new ways of driving financial returns.

• Ecosystem logic can be integrated before deployment — i.e. carrying out the ecosystem purpose and research-led work before operationally deploying capital.